Don't Get Taken for a Ride

You want the car; the dealer wants a sale.

This could be a recipe for consumer disaster, unless you put your emotions in park and engage your intellect, says Scottie Dowdy of the Duke University Federal Credit Union.

"When it comes to car buying, facts matter more than falling in love," she said.

Duke faculty and staff recently attended "Drive Away Happy," a Duke Credit Union seminar to learn how to buy a car that fits lifestyle -- and budget. The seminar was part of the credit union's financial seminar series, which also offers free workshops on home buying, reducing credit card debt and identity theft.

When it comes to car buying, the Duke Credit Union offers a Web site with resources and counselors who will help navigate the loan, warranty, insurance and more.

Dowdy said a car buying decision should first start with research.

Buy or lease? New or used? These are only the beginning of the questions. Dowdy said each option comes with pros and cons, and the best chance at a good deal is to research before visiting a dealer or car lot.

"Do your homework," Dowdy said. "You need to be prepared."

She suggested buyers keep the following in mind:

New cars are typically more reliable and have repair warranties, but a new car costs more to buy, insure and register. Used cars may be cheaper outright; however, consumers don't know how well the car was maintained, and it may not have a warranty.

Down the road, maintenance costs can be an issue.

Leasing a car may come with lower monthly payments, but insurance costs more and getting out of a lease contract is difficult. Leased cars come with comprehensive warranties -- but mileage limits.

After deciding on type of car, consider your budget, Dowdy said. Calculate how much extra it will cost each month for the car payment, registration, insurance, gas, parking and routine maintenance. Put that money aside each month for a few months.

Can you live on the new budget?

"If you can't, where's the money going to come from?" Dowdy asked.

Libby Lang, a Durham Academy teacher, learned about the credit union's car buying seminars from her father, a retired orthopedic surgeon at Duke. She attended a session last year when she was thinking about replacing her 13-year-old Honda Accord. She didn't end up immediately buying a car, but she has the information for when she shops around this year.

"The session addressed everyone's diverse backgrounds and needs," Lang said. "I loved that it was free. That is a positive outreach Duke provides."